Total and Permanent Disability Discharge Issues _____

1
Total and Permanent Disability Discharge
Issues_____

• November 16, 2004
• Baltimore, Maryland

2
Partial Discharge of a Joint Consolidation
Loan_____

• Kathy Leatherbury
• USA Funds

3
Partial Discharge QA

• Sent to ED in September, 2004
• Addresses processing issues for partial discharge
  of a joint Consolidation loan when one
  borrower is granted conditional discharge
• Allows guarantors to follow the QA guidance
  unless/until otherwise notified by ED

4
Partial Discharge QA

• Administrative forbearance for non-disabled
  borrower if unable to make payments
• Administrative forbearance starts no earlier than
  the date acceptable TPD documentation is received
• Administrative forbearance ends no later than
  the date the loan holder receives notification of
  final determination

5
Partial Discharge QA

• Deferment based solely on non-disabled borrowers
  eligibility during the conditional discharge
  period
• Deferment begins no earlier than the date
  acceptable TPD documentation is received
• Deferment ends no later than the earlier of the
  date the loan holder receives notification of
  final determination or the deferment eligibility
  expires

6
Partial Discharge QA

• Due diligence
• No letters or calls to the disabled borrower for
  any portion of the Consolidation loan during the
  conditional discharge period
• If in default, guarantor continues to report
  to credit bureaus

7
June 2004 Meeting with the Department of
Education_____

• Rinn Harper
• Texas Guaranteed

8
Background

• DACS identified
• Assignment issues
• Communication issues
• Meeting attendees
• DACS
• Department of Education CCDU
• Financial Partners

9
Issues Discussed

• Payment information being rejected for various
  reasons
• Batches of discharge submissions being rejected
  wholesale
• Turnaround time excessive
• Rules developed and implemented inconsistently

10
Issues Discussed

• Redundant, manual, and inefficient parameters on
  the assignment process
• Files submitted electronically appear to be
  processed against different standards than paper
  files
• School DCL has not yet been published
• Additional medical information or documentation
  is not used appropriately

11
TPD Issues Matrix_____

• Ron Stroud
• Texas Guaranteed

12
TPD Issues Matrix

• Created by FFELP workgroup to address outstanding
  issues with EDs Conditional Disability Discharge
  (CDD) Unit
• CDD Unit e-mail guidance
• Private guidance and other return reasons

13
TPD Issues Matrix

• Modifications to dates
• Payment history
• Lump sum vs. detail
• Loans made after a previous TPD
• Modifications other than dates

14
TPD Issues Matrix

• Subsequent bankruptcy documentation
• Post-assignment updates
• Date of disability between disbursement dates
• Conflicting private guidance

15
TPD Issues Matrix

• Communication of procedural changes
• E-mail vs. central location
• www.fsacollections.ed.gov/contractors/ga/cdd/index
  .htm
• Effective date of procedural changes

16
TPD Packaging Criteria_____

• Barbara Wilhelm
• Sallie Mae

17
TPD Packaging Criteria

• Created by FFELP workgroup to standardize
  assignment submission
• Proposed criteria to be shared to reach agreement
  with ED
• Goals
• Simplify and standardize assignment process
• Facilitate smooth and timely transition for
  borrowers

18
TPD Packaging Criteria

• Loan Discharge Application Total Permanent
  Disability
• Any supporting documentation from the physician
• Promissory Note(s)
• Payment history for refundable payments
• Any current judgment or bankruptcy documentation

19
TPD Packaging Criteria

• Loan discharge application
• All fields completed
• All dates in MM-DD-YYYY format
• Alterations
• Dates Certifying physicians initials in close
  proximity
• Other Information Certifying physicians
  initials in close proximity
• Original borrower signature (if copy, certified
  true and exact)

20
TPD Packaging Criteria

• Payment Histories
• Lump sum payment history
• New proposed borrower refund form
• Borrower name
• SSN
• Date unable to work
• Total amount of refund (or 0)

21
TPD Packaging Criteria

• Detailed Payment History
• All pages contain borrower name and SSN
• Total amount of each payment
• Payment effective date (receipt date)
• Clearly identify any refundable payments

22
TPD Packaging Criteria

• Other Helpful Packaging Approaches
• Ensure all applicable documents are included in
  file
• Ensure all copies are legible
• Staple or fasten all documents for same
  borrower together

23
Thank you for joining us!Please be sure to
complete your conference evaluation form.

• Rinn Harper, Texas Guaranteed
• Kathy Leatherbury, USA Funds
• Ron Stroud, Texas Guaranteed
• Barbara Wilhelm, Sallie Mae